NITI Aayog’s Frontier Tech Hub has released a data centre evaluation framework to help state governments assess investment proposals based on infrastructure readiness, resource availability, environmental sustainability and long-term economic value. Released on October 14, 2026, the framework aims to help states prepare for the next phase of data centre expansion while addressing constraints related to power, water, land and connectivity.
India’s data centre capacity has increased from around 375 MW in 2020 to approximately 1.5 GW currently, driven by demand for artificial intelligence (AI), cloud computing, high-performance computing and other data-intensive applications. With projects placing growing demands on local resources and infrastructure, the framework calls for States to focus on investment readiness alongside attracting capital.
Developed with inputs from industry, the Ministry of Electronics and Information Technology (MeitY), the Ministry of Power and the Department for Promotion of Industry and Internal Trade (DPIIT), the framework is organised around five pillars: power and energy; water and cooling; siting and environmental sustainability; economic and strategic value; and policy, governance and implementation.
The recommendations include assessing grid readiness and net grid draw, promoting renewable energy and storage-backed power, evaluating water stress and public-supply requirements, and encouraging rainwater harvesting and on-site water treatment. It also calls for lifecycle management of e-waste, batteries and other hazardous waste.
To improve the economic returns from data centre investments, the framework recommends identifying suitable locations, distinguishing colocation facilities from active compute services, linking State incentives to measurable outcomes and promoting domestic manufacturing across IT and non-IT infrastructure. Time-bound approvals, clear accountability and monitoring of project commitments are also identified as important measures.
NITI Aayog member professor highlighted the need to strengthen domestic research and development, industry-academia collaboration and Indian participation across the data centre technology value chain. He also pointed to opportunities in advanced cooling, energy efficiency and resource-efficient computing.
Chief executive officer (CEO), NITI Aayog stressed the importance of assessing infrastructure availability, resource requirements and potential economic benefits before States commit support to projects. The framework is intended to help governments anticipate constraints and improve project execution without introducing an additional layer of regulation.
Meanwhile, distinguished fellow at NITI Aayog, said the objective is to help states identify suitable locations, plan infrastructure ahead of demand and ensure that investments deliver measurable public value.